Favorite Schools

Favorite Teams

Poll: Should Christie blame feds for NJ's $800M budget gap?

Chris Christie: 'Nothing is off the table' to close $800 million budget shortfallNew Jersey Gov. Chris Christie attributes the state’s recently discovered $800 million budget shortfall to federal tax hikes that prompted wealthy taxpayers to change their behavior and says he won’t rule out cuts to any planned spending to close the gap as mandated by the state constitution. (video by Brian Donohue / The Star-Ledger.

At a news conference Tuesday, the Republican governor said he was blindsided when April tax collections came in at least $600 million below his estimates. That caused the state budget gap to balloon and will force Christie to make deep and difficult cuts to the spending plan in the next 60 days.

His explanation for what happened?

"What we're being told initially is that this is the effect of the change in the law at the end of 2012 by the Obama administration and the Congress to increase tax rates on upper-level individuals," Christie explained.

In 2013, Congress raised the tax rate on wealthy earners by allowing some of former President George W. Bush's tax cuts expire.

Christie said this made many wealthy New Jersey residents move their income so that it would be taxed in 2012, before the rates took effect. He said that led to large holes into several state's budgets several state budgets.

"Remember that the top 1 percent in this state pays 40 percent of the income tax," he said. "So when you start to make changes, they're going to change their behavior."

But U.S. Rep Bill Pascrell (D-9th Dist.), a veteran New Jersey congressman, fired back at the governor. He said he is "sick and tired of Gov. Christie blaming all of his problems on the federal government" when something goes wrong in his state.

State Sen. Paul Sarlo (D-Bergen), the chairman of the Senate's budget committee, added that Christie could have easily predicted this issue. In April 2013, Sarlo said, the state budget received a $525 windfall because of the same changes in federal law. Christie should have known that was a one-time boost, the senator said.

"They knew about it last year and took advantage of it," he said. "Clearly, a miscalculation was made."